HomeMy WebLinkAbout2004-06-08 - AGENDA REPORTS - FIRST TIME HOMEBUYERS PGM (2)NEW BUSINESS
DATE:
SUBJECT:
DEPARTMENT:
Agenda Item: #
CITY OF SANTA CLARITA
AGENDA REPORT
City Manager Approval:
Item to be presented by:
June 8, 2004
Dennis Luppens
FIRST-TIME HOMEBUYER PROGRAM
Administrative Services
RECOMMENDED ACTION
City Council approve the change in the method for computing the amount of federal assistance in
the First -Time Homebuyer Program. Increase the amount of assistance to a maximum of 40% of
the purchase price of the home, not to exceed $100,000.
BACKGROUND
As a result ofthel994 earthquake, in 1996, the City used State and Federal funds to make
low-interest earthquake damage repair loans. Approximately $580,000 in loans were approved.
In the past eight years, approximately $359,800 has been repaid with interest, used for loans in a
First -Time Homebuyer (FTHB) Program and grants and loans in a Residential Rehabilitation
Program. The original FTHB Program provided a maximum of $40,000 and required a
rehabilitation component. No loans were made under the original guidelines.
In 2002, the City Council approved a change in the structure of the FTHB Program. The second
mortgage maximum was increased to $60,000, and the requirement for rehabilitation was
removed. In 2002 and 2003, four FTHB loans were made under the new guidelines, totaling
$235,227. All available funds were exhausted. Pending approval of the 04-05 budget, as of
July 1, 2004, $184,329 will be available to the FTHB Program.
It has not been possible to re -loan the funds since they have been received. The rapidly
increasing housing costs in Santa Clarita, and in all of California, coupled with the slow-growing
low- and moderate -income limits required by HUD, has made it impossible for the FTHB
Program to work in its present configuration. The low- and moderate -income buyer's first
mortgage, combined with the maximum $60,000 FTHB second mortgage, still does not provide
enough buying power to purchase even the most entry-level condominium. Attached is a graph
which will illustrate this situation.
ALTERNATIVE ACTIONS
1. Not approve changes in the FTHB Program.
2. Other Council action.
FISCAL IMPACT
The approval of staffs recommendation will not increase appropriations to the City's budget.
Funds for this program come from re -paid loans and Community Development Block Grant
(CDBG) funds appropriated into the budget. No General Funds are used in this program.
ATTACHMENTS
Housing Affordability Gap Chart
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